As one of those annoying people that talks incessantly about the dividend yield and growth of this and that company, I thought it would be worthwhile to take a step back and look at something different. I am still going to talk about dividends, of course, but today let's focus on the dividend yield of country indices.

Below I have two charts for your gazing pleasure. The first chart shows the 2010 dividend yield of a few major developed and emerging countries and their historical dividend yield; the second looks at the change in dividend yield for the same countries over the last ten years.

I want to make three quick but potentially important observations from the above mess of squiggly lines:

The United States has a low dividend yield. I don't want to insult my American friends by comparing size here but it's true: U.S. companies have among the lowest dividend yields in the world. Back in the good ol' days, the American economy was growing by leaps and bounds and was the envy of the word so a low dividend yield made perfect sense. Now that even the most optimistic projections call for years of tepid growth, this low yield should no longer be considered acceptable.

Consider Canada and Australia. Don't tell these countries we just experienced a lost decade. Gaze upon their decade long bull market with wonder!

(Click chart to enlarge)

Click to enlarge

The really impressive thing here isn't the strong price appreciation but that the dividend growth of these two countries has kept pace. In fact, by using the historical dividend yield as a measuring stick, they are actually undervalued. By this measure, Australia is 3.8% undervalued and Canada is a full 10.1% undervalued.

Be Cautious with the BRICs. This could be called: A tale of two bull markets. While dividends in Canada and Australia have kept up with price appreciation, the same is definitely not true for many emerging markets. Ignoring China which was impacted by a little price bubble earlier this decade, the rest of the so-called BRIC countries' dividend yields have plummeted this decade. Again, I direct your attention below:

This seems particularly worrisome for Brazil and India. Again, using historical dividend yield as a measure, Brazil is 27.2% overvalued and India 32.3% overvalued. I realize, of course, that more goes into selecting investment opportunities than dividend yield. Still, this metric is flashing a bright yellow "caution" light.

Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.